HONG KONG (MarketWatch) — Asia shares tumbled Tuesday with declining commodity prices and fresh signs of weakness in the U.S. economy hitting stocks ahead of key events later in the week.
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South Korea’s Kospi /zigman2/quotes/210598069/delayed KR:180721 -1.49% dropped 1.7%. Hong Kong’s Hang Seng Index /zigman2/quotes/210598030/delayed HK:HSI -1.09% fell 1.5% to end at its lowest closing level since July 26.
Australia’s S&P/ASX 200 index /zigman2/quotes/210598100/delayed AU:XJO -0.33% fell 0.6% and Singapore’s Straits Times index was off 0.5% late.
The Asia Dow was down 1.5%.
Japan’s Nikkei Stock Average /zigman2/quotes/210597971/delayed JP:NIK -0.39% retreated 1.1%, and China’s Shanghai Composite /zigman2/quotes/206600939/delayed CN:000001 -0.06% trimmed losses to trade 0.3% lower.
The moves followed a mixed performance for U.S. stocks Tuesday as trading resumed after the Labor Day holiday. Read more on the U.S. session.
Daiwa Capital Markets analysts Kevin Lai in Hong Kong said Asia is succumbing to a deepening downturn as slumping inner-regional trade adds to overseas weakness.
“The latest indicators support our view that the demand environment, both externally and internally, remains very harsh for Asia,” Lai said in a note Wednesday.
Data out earlier this week showed that South Korea is poised for a drop in annual exports, marking only the fourth time annual exports have contracted.
Lai said the trade figures, among the first to be released, could serve “as a precursor of what may appear for the rest of the region.”
Louis Capital Markets’ director of equity sales, Tom Kaan, said that “everything is on hold” before the European Central Bank meeting slated for Thursday and the monthly U.S. employment data on Friday.
“The global economic data haven’t been anything to shout about, and people are not willing to take on any decent long positions in Asia,” Kaan said.
ECB President Mario Draghi is expected to unveil measures to support sluggish growth in debt-stricken Europe.
“Draghi is going to have to put money where his mouth is and implement the bond-purchasing program, or the ECB could be looking to ease interest rates further to stimulate the economy,” Kaan said.